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Sacombank in Eximbank’s crosshairs
Manoeuvres in the dark for the hostile acquisition of Sacombank are now out in the open.
During the past year, following three institutional major shareholders Dragon Capital, REE and ANZ divesting their stakes in Sacombank, rumours that a listed bank was undergoing a hostile takeover for the first time in Vietnam’s history created a media storm.
Sacombank is one of the three top Vietnamese private banks by total assets. The other two are Eximbank and ACB. In a letter sent to Sacombank chairman Dang Van Thanh last week, Eximbank, which holds a 9.73 per cent stake, called for a re-election of Sacombank’s board of directors.
Eximbank said some shareholders had authorised it to represent their interests in Sacombank, which meant its alliance was holding more than 51 per cent of the voting shares. Thanh told local media that the board of directors for 2011-2015 had been elected by a general shareholder meeting (GSM), and thus it could not be dismissed.
But, under the Law on Enterprises a re-election is possible if at least 65 per cent of the GSM agree to it. While Eximbank’s request is subject to voting at Sacombank’s GSM, which is expected to take place in April, the move proves that the hostile acquisition manoeuvres are reaching its climax.
If the Eximbank alliance is successful in calling for a re-election and has more seats in the board in comparison to Thanh and his associates, the alliance would win control of the bank. However, under the Law on Enterprises, a shareholder or a group of shareholders who holds more than 10 per cent but less than 20 per cent of voting shares can recommend one person for the board if they hold their shares for at least six consecutive months.
This rule raises a question of how many shares the Eximbank alliance has held for at least six consecutive months. Eximbank became a Sacombank shareholder only two months ago after acquiring ANZ’s stake.
Eximbank chairman Le Hung Dung claimed the shares his bank’s alliance had held for at least six months were equivalent to at least a 17 per cent stake. While Eximbank is yet to present a list of shareholders within its alliance, the bank stated it was willing to do so.
The list of Sacombank shareholders will only be released by the Vietnam Securities Depository a few weeks before a GSM. Sacombank has undertaken treasury share purchases and allegedly collected authorisations from other shareholders to increase the voting rights at the upcoming GSM to fight off takeover threats.
Mac Quang Huy, deputy head of Thang Long Securities, said it was too late for Sacombank [chairman Thanh and his affiliates] to find a “white knight” as it was very likely that Eximbank’s alliance was already holding a 51 per cent stake in the bank.
Huy said that at the moment, Sacombank could use “Pac-Man strategy” against a hostile takeover by buying Eximbank shares, but Vietnam’s Credit Institution Law did not allow a credit institution to buy its shareholder’s stock.
He noted there was “little chance” for Thanh and his affiliates to successfully prevent a hostile takeover and given the ongoing local banking sector restructuring process, mergers and acquisitions was a positive trend.
“Given the clear existing laws, mergers and acquisitions of banks will not bring threats of a monopoly or affect the interests of customers. They will create better services for customers and save the social resources,” he said.
In its letter, Eximbank also expressed concerns that Sacombank had recently carried out some big transactions that might harm the interests of its shareholders. The bank also asked Sacombank to raise its profit target for 2012 by at least 15 per cent “in line with its scale.”
Leading joint stock bank ACB, state-owned creditor Vietcombank, Japan’s Sumitomo Mitsui Banking Corporation and VOF Investment Limited are major shareholders of Eximbank.
Sacombank, whose stock code is STB, has steadily led the market in terms of trading volume over the past months, with hostile acquisition manoeuvres very likely to be the primary reason. The rumour has it that ACB is an entity within Eximbank’s alliance.
State Bank of Vietnam last week listed Sacombank in Group 1 when it comes to credit growth limits for 2012. This group is offered the highest credit growth cap of 17 per cent for their “best health”.
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